Turbo Tax Customers pursued by HRB & Tax Act

[Lee B]

Copied from USA Today:

 

 

TurboTax rival Tax Act is the latest company to try to lure angry TurboTax users – by literally offering to pay them to switch.

 

Tax Act, which is a desktop and cloud-based tax-preparation software, will pay consumers $1.50 if they file their Federal tax returns using their software. The payment is being made using an online service called Swag Bucks, which can be redeemed as cash by using eBay’s (EBAY) PayPal.

It’s unclear if $1.50 will be enough to lure away die-hard users of TurboTax, which continues to be the market leader. But Intuit (INTU), the maker of TurboTax, has certainly angered many of its users with a number of missteps this tax season.

 

First, Intuit company attempted to push through a stealth 50% price hike by removing the forms investors and self-employed taxpayers need to fill out their returns. Users of TurboTax’ Deluxe product found out, right when they were finished, they needed to buy the more expensive Premier or Home & Business versions. Intuit first offered a $25 rebate to users – and then later this weekend allowed for free upgrades to Premier and Home & Business.

 

And then, last week, TurboTax temporarily shut down its ability to e-file state returns due to fraud allegations. The outage lasted less than 24 hours, but was still a mar on what has been the gold standard in tax-preparation software.

 

 Taxpayers who file using its $12.99 Deluxe program, for instance, can get Swag Bucks reward valued at $9, making the cost of the software $4.

 

The move by Tax Act is just one of the latest by TurboTax rivals to take advantage of TurboTax’ missteps. H&R Block (HRB), for instance, is offering its software free to TurboTax users.

 

Taxpayers, though, tend to form strong habits they repeat year after year. It’s unclear if $1.50 will be enough to convince longtime TurboTax users to switch.

 

Investors are still trying to gauge how Intuit’s rough tax season will affect profit and the stock. Scott Kessler, analyst at S&P Capital IQ, reiterated his “hold” rating on shares of Intuit. Intuit “has issued related apologies, rebates and free upgrades, he says. “We wonder about the impact of these developments.”

Shares of Intuit rose a penny Monday to $87.84.